Foreign debt default is unavoidable, Argentine officials say
http://www.latimes.com/world/mexico-americas/la-fg-argentina-debt-20140621-story.html
Argentine President Cristina Fernandez de Kirchner arrives at the Flag Monument in Rosario to celebrate Flag Day on June 20.
Foreign debt default is unavoidable, Argentine officials say
Andres D'Alessandro, Chris Kraul
6.20.2014
Although Argentina's apparently imminent default on its foreign debt is unlikely to trigger a rerun of the economic and political crises that nearly tore the country apart a decade ago, it could usher in a new era of hardship, analysts said Friday.
President Cristina Fernandez de Kirchner said this week that she wouldn't make a $2.23-billion payment due June 30 to foreign bondholders. The economy ministry followed up with a statement saying that avoiding a foreign debt default, which would be the country's second since 2001, was "impossible."
Of the amount due, $900 million is owed to creditors who accepted deep discounts in their bonds' face value during restructuring in 2005 and 2010. The additional $1.33 billion is owed to "vulture" bondholders who refused the discounts and whose claim for full payment was upheld Monday by the U.S. Supreme Court.
News of a likely default recalled the turmoil of late 2001 and early 2002, when Argentina was forced to devalue its currency and freeze bank accounts, leading to years of high inflation and recession. Over a one-month period ending in December 2001, a succession of five presidents occupied the Casa Rosada presidential palace.